Manchester
State Bank of Pakistan Governor Reza Baqir has defended the rupee devaluation saying it benefited overseas Pakistanis and claimed that inflation in Pakistan was artificial.
His statement comes as the PTI government forms price control committees and mulls a targeted subsidy on petrol.
Reza Baqir spoke to journalists in Manchester, he said inflation in Pakistan is artificial and will be controlled soon.
Baqir said rising exchange rates had pushed up prices in Pakistan. However, in the same breath, the SBP governor defended the rupee devaluation, saying it benefited overseas Pakistanis. “How does it benefit them? Because our brothers and sisters from these countries who send their hard-earned money back home their remittances are increasing.”
Baqir said that while a floating exchange rate hurt “some” people, it also resulted in benefits for others.
“If this year our remittances, for example, grow to $30 billion or more, and if [the rupee] depreciated 10% over the last few months, the families of overseas Pakistanis get an additional three billion dollars. This translates into more than Rs500 billion,” he said.
“What I meant to say is that every economic policy benefits some and doesn’t benefit some others. When you speak about people who don’t reap the benefit, you shouldn’t forget those who do.”
Sharing a clip from Baqir’s press talk, a UK-based Pakistani Omer Azhar said that for the first two days of his UK visit, Reza Baqir had refused to comment on rupee depreciation and rising inflation and then he spoke about the “benefits” of the rupee devaluation, but “it is clear that majority suffers from rupee nosedive, effects of which are amplified due to commodities’ supply chain mismanagement by government.”
Azhar claimed that the SBP governor had “appealed to PTI’s overseas voter constituency and tried to sell an inherently unfavourable policy as beneficial.” —INP
